Chart Industries, Inc., a significant player in the rail industry for providing equipment for LNG (liquefied natural gas)-powered locomotives, has made a significant investment in a Canadian supplier of hydrogen fuel cell technology.
Chart, which describes itself as “a leading global manufacturer of liquefaction and cryogenic equipment serving multiple applications in the energy and industrial gas end markets, including hydrogen,” has acquired a 15.6% stake in Vancouver, B.C.-based Hydrogen Technology & Energy Corporation (HTEC), which designs, builds and operates hydrogen fuel supply solutions to support the deployment of hydrogen fuel cell (HFC) electric vehicles. Chart’s C$20 million investment is in capital stock on a fully diluted basis.
Chart’s investment in HTEC comes at the same time that the Canadian government deployed its Hydrogen Strategy for Canada, and Canadian Pacific announced that it is developing an HFC-powered line-haul locomotive.
“HTEC has significant hydrogen development experience in the Canadian market, with signed contracts for numerous projects across the country,” Chart said. “With HTEC’s existing retail fueling station networks, heavy-duty fueling station experience and electrolysis opportunities in British Columbia, Quebec and Alberta, this investment achieves both criteria for our strategic inorganic investments in clean energy, specialty markets and repair and service. First, the investment brings access to customers and commercial projects that could not be accessed without significant organic investment. Second, the investment brings access to regions/geographies for the respective products and applications that otherwise could not readily be accessed due to lack of product experience in the region, certification requirements or government funding and relationships.”
Chart and HTEC also executed a binding commercial Memorandum of Understanding (MOU) that “establishes the commercial collaboration and equipment supply arrangements for Chart to supply HTEC projects,” the company said. “HTEC’s strong customer base, including Shell, 7 Eleven, Toyota and Hyundai, along with its solid relationships with Canadian governments, will help facilitate opportunities to expand Chart’s equipment presence both geographically and across global customers.”
“This investment in and commercial agreement with HTEC is yet another step in expanding our high-growth products and businesses within Chart, specifically clean energy and specialty products and markets,” said Chart President and CEO Jill Evanko. “We are excited to have a more significant presence in Canada, a country with a federal government as well as provincial governments committing substantial funding to boosting the hydrogen fuel sector, including a national Hydrogen Strategy to be released before year-end.”
“Strategic collaborations have been a critical part of our company’s evolution,” said HTEC President and CEO Colin Armstrong. “We are proud to work with Chart and are excited about the range of products it offers that will play a key role in the global push toward more sustainable energy systems.”
Winston & Strawn LLP and Stikeman Elliott LLP served as legal advisors to Chart on the HTEC transaction. Fort Capital Partners acted as financial advisor to HTEC on the transaction, with Blake, Cassels & Graydon LLP as legal counsel.
Chart noted that its investment “provides further opportunities to achieve a significant portion of our addressable market of $1.1 billion for Chart’s quickly growing hydrogen business by 2023. Fourth-quarter 2020 to date (October 1, 2020 through December 11, 2020), Chart has booked record hydrogen equipment orders totaling $18.1 million, an 85% sequential increase over third-quarter 2020, and we expect this trend to continue.
Download this presentation that further describes the investment: